February 2016

Rail and waterways are the most environmentally friendly modes of transport. They also provide the backbone for accelerated economic growth since they are able to carry huge amounts of freight over longer distances and in an economically efficient manner.

The main handicap for rail and waterways, however, is that these modes of transport must be linked to roads to provide final connectivity to ports, industries or ultimate customers. Therefore in order to leverage large infrastructure investments, it is necessary to have strategically placed transshipment hubs or multimodal stations that allow for multimodal logistics – combining rail, water and road.

Such facilities concentrate critical logistics operations, such as transfer of cargo between modes of transportation, preliminary processing and packaging, consolidation of cargo, and freight storage, all in a single location, thereby taking advantage of economies of scale. However, how are we to efficiently determine the strategic location of these exchanges?
Waterways in India / Photo: Tracy Hunter

These locations are often chosen based on availability of land or at locations that may be advantageous for a particular mode. In reality, the ideal solution requires optimization of multiple criteria. And here, big data can become a great ally in tackling this challenge.

In our latest post we explained why mobility on foot and urban logistics are closely related. There are several challenges of delivering large quantities of goods to concentrated urban areas, particularly in cities with limited infrastructure, as is the case of most cities in our client countries.
Photo: by Felipe Gomes - São Paulo City

Despite the challenges, however, there are also some important opportunities to improve urban logistics and deliver goods more effectively. First, the level of consumption in these cities is still low when compared to higher-income cities, although inequalities may result in large variations within the cities’ landscape. Second, some of the solutions, such as bicycle or on foot deliveries and pick-up points (the latter a common solution for slum areas), seem to be efficient alternatives for dense neighborhoods, and because of their lower costs are also attractive for lower-income cities. These solutions can be bundled with investments for non-motorized transport, such as improvements on sidewalks and bikeways facilities.

In Sao Paulo, Brazil, for example, recent investments in 400km of bikeways have boosted the growth of deliveries on bikes. (Read more about the study) The numbers are still small, with some 500 bike couriers compared to 200,000 motorcycle couriers. But bike deliveries are cheaper for trips under 10km, generate around 10 times less CO2 than motorized trips, even taking into account the additional dietary intake of a cyclist compared with that of a motorized user, and promote health benefits.

The Bank is currently working on initiatives to support urban logistics in middle and low-income countries, and because of the general data scarcity, has been working to lay down the basics first. At least two projects stand out: one in Casablanca, Morocco, and the other in Sao Paulo, Brazil. Casablanca is a city with traditional retail channels, where 80% are small or nano-stores. This project is a comprehensive initiative that developed a methodology and support tool to measure the effects of policies with limited data, and was undertaken by a group of World Bank colleagues in the Trade and Competitiveness group, the University of Eindhoven, and the Agence Marocaine de Développement de la Logistique (AMDL).

Peatonito is a Mexican transport specialist using humor to interact with drivers and create awareness about the need to respect traffic rules. Photo: Peatonito / Flick

Walking is the cheapest, most non-polluting, and possibly healthiest mode of transport. And dense cities seem to be a pre-existing condition for enabling us to meet our daily walking needs, along with diversified land uses, typically called “mixed-use development”. Densification and “mixed-use development” are currently seen as a strategy for designing sustainable cities, and many high-quality mobility plans, which consider the interactions between land use and transport, also pursue this type of urban development.

But densification and “mixed-use development” present (at least) two challenges. The first is how to provide quality pedestrian infrastructure that encourages non-motorized mode choices. The second is how to efficiently deliver the large quantities of goods required in these dense cities. These were the themes of successful seminars recently held in Sao Paulo, Brazil, thanks to a World Bank’s Global Environmental Facility grant.
The “mobility by foot” seminar was a four-day learning event on pedestrian mobility organized by Brazil’s Associação Nacional de Transportes Públicos. In Brazil, as in most cities in Latin America, around 35% of people’s daily trips are on foot, and there is evidence that this number is underestimated given the limitations of current data collection methods. Given the priority in reducing the impact of our carbon “footprint” (or “carprint”), governments need more evidence and incentives to move the sustainability agenda forward.

Public transport is an important mode of transport, especially for low-income populations. Cities, however, struggle to provide public transport services for fares that are both affordable and financially sustainable. Since meeting both goals is quite difficult, transport systems either end up relying on high levels of subsidies or charging transit fares that are too expensive for the city’s poor.

To tackle this challenge, the World Bank in 2013 supported the city authorities of Bogotá, Colombia, in designing a pro-poor transport subsidy scheme that would help low-income populations have access to more affordable public transport. In Bogotá fares for its new public transit system are set higher -closer to cost-recovery levels-, than in other cities that provide greater public subsidies to their operators. Despite having more sustainable fares, Bogotá risks excluding people from its transport services—in fact, households in the poorest areas of the city spend a greater percentage of their income on transport, between 16% to 27%, compared to a maximum of 4% in areas that are relatively richer.